7th APRIL 2015 - Vol.XXXVIII No.018
Business News

Dollar hit by weak jobs data

LONDON: The dollar fell yesterday on news that fewer US jobs were created than expected in June, suggesting that the pace of economic growth there might be easing.

The euro climbed to 1.2818 dollars in late European trading from 1.2778 dollars late on Thursday in New York.

The dollar eased to 114.03 yen from 115.10 yen on Thursday.

Data from the US Labour Department showed that payroll numbers rose by 121,000 in June, higher than the upwardly-revised 92,000 improvement in May but lower than the consensus forecast for 160,000 new jobs.

In fact, traders had been positioned for an even larger number following a strong survey earlier this week from ADP Employer Services.

Friday's snapshot of job activity also showed the US unemployment rate holding steady at 4.6 per cent, diminishing concerns about the economy using up its spare capacity.

Divyang Shah, global strategist at HBOS, said the payroll figure was an important market event but stressed that inflation data were more important at present.

"In the current environment it's the inflation data that has proved to be much more important as it is this that has surprised to the upside," he said.

"Thus while the forex (foreign exchange) market will react to payrolls and probably play on it over next week, the events over the following week will prove more insightful as to the Fed rate outlook."

Expectations of an interest rate hike by the Federal Reserve in August diminished last week when policymakers published a mild statement alongside their decision to lift the key Fed funds rate by a quarter point for the seventeenth consecutive time to 5.25pc.

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